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Modi govt to form standing committee to prevent drugmakers from evading price control

Representatives from NPPA, CDSCO and DGHS to be part of the standing committee, which will have mandate to approve the drug discontinuation applications.

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New Delhi: The Narendra Modi government has decided to form a standing committee to approve requests from pharmaceutical companies for discontinuation of scheduled medicines. The move is an effort to ensure that the drugmakers don’t escape price control of these drugs.

Scheduled medicines are essential drugs regulated by the government in terms of their pricing and availability in the market. The government sets the maximum price limit for these scheduled drugs.

The central government’s drug pricing and availability watchdog, the National Pharmaceuticals Pricing Authority (NPPA), has decided to form a “standing committee”, to which the companies will have to submit their discontinuation requests.

The new guidelines, seen by ThePrint, state that the committee will comprise the NPPA’s Advisor (cost), a representative from country’s apex drug quality regulator, Central Drugs Standard Control Organisation (CDSCO), and a representative from the Directorate General of Health Services, the technical knowledge arm of the Ministry of Health and Family Welfare.

“The authority in its meeting held on 6 August has approved guidelines for dealing with cases of discontinuation of scheduled formulations under para 21(2) of drug pricing control order, 2013,” reads the office memorandum issued by NPPA member secretary Vinod Kotwal on 14 August. “These guidelines will be effective with immediate effect and be applicable to all cases under consideration and future cases.”

According to the guidelines attached along with the office memorandum, the committee will look into cases where it is established that the drugmaker is intending to discontinue production or import of an essential medicine but has already launched (or intends to launch) “a new drug” to evade price control.

Moreover, the committee will have to approve the request for discontinuation of those medicines, which can evoke “concerns of shortage” or “criticality of the drug” is higher “for public health”.

Also read: Global firms Abbott, Danone under Modi govt lens again for breaking law to promote baby food

Ads in newspapers mandatory before discontinuation

According to the guidelines, manufacturers of drugs intending to discontinue any scheduled formulation will need to issue a public notice and intimate the government in a prescribed format “at least six months prior to the intended date of discontinuation”.

Further, the government may ask the manufacturer of the drug to continue the required level of production or import for a period not exceeding one year, from the intended date of discontinuation within a period of 60 days of receipt of such intimation.

In case the sales of the product is 1 per cent or less than 1 per cent of total MAT (moving annual turnover) value of the category, “the company has to inform at least six months prior to the intended date of discontinuation and issue a public notice in at least one news paper”, the guidelines said.

In case of lesser market share, no further order will be given to the company and after completing the stipulated time period, the request for discontinuation will be deemed approved.

However, if a request is not submitted six months prior to the proposed date or market share is more than 1 per cent, the rules will be different. In case of greater market share, the company will be directed to issue public notice in at least two newspapers — one in English and other in Hindi. “It will also be directed to continue production or import of the formulation for the period of upto 12 months from the date of issue of public notice,” the guidelines state.

Industry questions mandatory newspaper advts

While the industry has questioned the government’s move of mandating the newspaper advertisement for drugs that have an insignificant market, it has welcomed the categorisation of guidelines based on market share.

“Industry welcomes the element of ease in keeping only two slabs now,” said Ashok Madan, executive director, lobby of domestic pharmaceutical companies, Indian Drug Manufacturers Association (IDMA).

The industry has already sent a request to NPPA for changing the clause of mandatory advertisement. “We have written our concern to NPPA. When the share of drugs is less than 1 per cent, the government should not insist on public notice in the newspaper. It’s an extra burden on the stressed finances of pharma companies,” said another official representing drug makers.

Also read: Modi govt’s generic drugs scheme doubles sales to Rs 200 cr as branded variants see a fall


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